The Brunei royal family: The Sultan, his brother and an &#163;8 billion family feud

It began when the fabulously wealthy ruler of a tiny sultanate accused his sibling - and finance minister -of embezzlement. Now the case has been dropped, amid legal costs estimated in the millions. But is this the end of the story? David Usborne reports

Wednesday 8 February 2006 00:00 BST

Click to followThe Independent Online

In the annals of fraternal feuds, surely none has matched the one that has played out for almost a decade between the Sultan of Brunei and his younger brother, Prince Jefri. It has been a legal battle over dollars - billions of them. Now, however, with the elder of the two throwing in the towel, it might at last be over.

Until last week, Jefri, 51, faced possible imprisonment because of his brother's continuing legal action against him. The man they call the Playboy Prince, whose taste in luxuries once ran to a gem-studded watch that revealed a copulating couple on the hour and a yacht named Tits, is free and clear. Instead of a prison cell, he can relax in any one of his grandiose homes in London, New York and Paris.

Word of the sudden cessation of hostilities surfaced yesterday. According to representatives of both sides, the Sultan, who was himself once listed as the world's wealthiest person, agreed last week to drop action against Jefri in London's High Court and pay legal fees of a million pounds. The Sultan is still not talking to his younger sibling - and hasn't for two years - but his legal onslaught has been called off.

For Brunei, a tiny but oil- and gas-rich sultanate of just 350,000 people on the northern edge of the island of Borneo, and for its ruling royal family, which has close ties to the British Royals and to the owner of Harrods, Mohamed al-Fayed, this must be good news indeed. Maybe at last, the humiliating public washing of their dollars-drenched laundry will be brought to an end.

Before the start of this family unpleasantness, all that we knew of the brothers and their extended clans was that they were fabulously rich, thanks to their nation's energy resources.

Sultan Hassanal Bolkiah, who is now 59, not only topped the world's most-wealthy lists, but he showed little restraint in flaunting his fortune to the rest of the world. Brunei had the reputation as some kind of gold-encrusted fantasy land.

You only had to visit the place to see the evidence. The Sultan had - and still has - a palace with plenty of space for guests. More specifically, the royal residence has no fewer than 1,788 rooms and corridors of gilt and marble. He had built mosques to rival any in the world, with minarets adorned in gold, pillars of Italian marble and welcome signs on their gates that were decorated with diamonds.

It is alleged that in the mid-90s Brunei's ruling family accounted for 50 per cent of all Rolls-Royce sales worldwide. (When it comes to cars, we were later to learn, no one could match Jefri for extravagant tastes.) They built one of the world's most extravagant theme parks for the citizenry of Brunei, charging £5 a ticket. In 1996, the Sultan hired Michael Jackson to serenade him at his 50th birthday party.

In the meantime, Jefri was starting his second decade as the sultanate's finance minister. His most important task was looking after the torrents of oil and gas money on behalf of the state body called the Brunei Investment Authority (BIA). His task was to find safe harbours for the cash around the world. He channelled much of it through his own investment company, Amedeo - apparently named after the painter Amedeo Modigliani, many of whose paintings were in Jefri's private collection. Amedeo was run by his son, Hakkim, who held the title of managing director.

Over time, Brunei accumulated a quite fantastic portfolio of assets around the globe, a few held in the name of the Sultan himself, such as the Dorchester Hotel in London, and many more controlled by Jefri through Amedeo. His purchases included an office tower in the City of London, Asprey jewellers on Bond Street, Cunard House on the Embankment, the former Playboy Club in Mayfair and the Palace Hotel in Manhattan. There were other sprawling properties as far afield as Paris and Las Vegas.

Simultaneously, Jefri was buying additional trinkets fitting for his tycoon lifestyle. Indeed, it was alleged that he spent in the region of $1.5bn on himself over 10 years. His playthings included some 2000 cars, comprising the very latest Ferrari, Rolls-Royce and Aston Martin models, 17 aircraft, including one attack Comanche helicopter, and the infamous SS Tits. Even his toilet brushes came in gold plate.

The yacht, custom-built for Jefri in a Netherlands boatyard, measured 180 feet. It had 24-carat gold fittings, marble embellishments and lifts that connected the multiple decks. If the name Tits seemed not to be in the best possible taste, consider the names of the two speed boats that came with the yacht - Nipple I and Nipple II. And while Jefri was responsible for no fewer than four wives and 35 children, some adopted, there was rampant gossip about the other women he joyously entertained.

Jefri's gallivanting first started to go sour in the mid-90s when he suddenly became the target of gravely unflattering tabloid headlines at the hands of a group of American beauty queens, including a former Miss USA, who sued him, claiming they had been subjected to sexual abuse from his friends while guests at the Royal Palace in Brunei. Immediately named the "Randy Royal", he only escaped prosecution in the US because of his diplomatic immunity.

But the unravelling had only just begun. No sooner was the beauty-queen scandal settled when Amedeo, hurt by the 1997 economic crisis in Asia, abruptly collapsed, forcing a bailout by the government of Brunei.

With the implosion of Amedeo, Jefri was fired as finance minister, a post he had by then held for 13 years, by his brother, the Sultan. But, as brotherly resentment simmered, worse was still to come. In 2000, the Sultan sued his younger sibling in London, accusing him effectively of embezzling £8bn from the BIA for the sole purpose of supporting his lavish, playboy lifestyle.

At first, it seemed that the legal engagement between the two men would be quickly laid to rest. In an out-of-court settlement, Jefri agreed to hand over assets worth £3bn to BIA, including hotels, aircraft and the infamous yacht and speed boats. He agreed to raise additional cash through an auction of some of his most prized personal goodies, ranging from 16,000 tons of Italian marble to a pair of sparkling Mercedes Benz fire engines.

Held in London in 2001 by Smith Hodgkinson, the auction was instantly called "The Sale of the Century" by newspapers. Potential bidders had to pay £300 simply to attend.

The 60-page catalogue listed no fewer than 10,000 lots, all of which had been crammed into 21 different warehouses.

To complete the humbling of Jefri, Brunei agreed to give him a monthly allowance of just under £200,000, ignoring his pleas for more. (How could he support his wives, children and still expansive transport fleet on such a measly sum, he demanded to know?) And so, the whole nasty affair was over.

Or at least it should have been. But here was the odd thing: even denuded of his many former assets and constrained by his monthly allowance, Jefri still managed to live a life of considerable opulence. How? That was the question being asked by his brother, the Sultan, who later went back to the High Court demanding that Jefri reveal the sources of income or face prison time. Lord Justice Waller apparently agreed that the scale of Jefri's lifestyle following the 2001 auction ruled out the possibility that he was simply gaining additional support from wealthy relatives and supporters, unless, he declared "the prince had won the lottery or had had some good evenings in the casino".

At first Jefri and his lawyers tried to halt the action, saying any effort to unveil the secrets of his continuing wealth would have amounted to a violation of his rights under the European Human Rights Convention. It was a strategy that the court flatly rejected, however. Jefri still refused to budge and the prospect of prison loomed ever larger. Until last week, that was.

Just why the Sultan has chosen to back off now is not clear. If they are still not talking to one another, a sudden return of sibling sentimentality would not seem to explain it. Perhaps the Sultan has simply concluded that he has better things to do, like running a country. Brunei stands out as an economic paradise among its Asian neighbours. It has a relatively healthy and wealthy population with a 92 per cent literacy rate and life expectancy of 78 for women and 75 for men, far above other countries in the region. It boasts no income tax, free health care, education and pensions.

But there are clouds on Brunei's horizon, not least forecasts that its energy gas reserves will be gone in about two decades. Meanwhile human rights activists continue to question the near-feudal rule exercised by the Sultan and the state of emergency in place since British troops put down a rebellion in 1962.

Most likely, however, the Sultan is tired of the garish and embarrassing headlines generated by his feud with Jefri, about bog brushes, porno watches and profligacy on a scale the world has rarely seen.

Prince Jefri and the 'sale of the century'

When Prince Jefri Bolkiah was forced to auction off an estimated £32m worth of assets during his seven-year High Court feud with his brother, it was christened, perhaps inevitably, the "sale of the century". In August 2001, more than 1,000 people arrived to bid for the 10,000 items, piled in 21 warehouses.

Lots included 8,500 slabs of Italian marble, 200 wrought-iron Victorian lamp posts, rooms full of Baccarat crystal and Limoges porcelain, and hundreds of Louis XIV-style sofas and chairs. Also up for grabs was a flight simulator for an Airbus A340 airliner, a Comanche attack helicopter simulator, and a Formula One racing simulator.

On a more prosaic note, there were two brand-new Mercedes fire engines and hundreds of matching gold- plated toilet brushes and other bathroom accessories.

There were also 3,000 items of crockery, many made by Asprey, which Prince Jefri once owned, two grand pianos, three automatic tennis ball servers and a recording studio. The factory where the auction was held was also for sale as were the chairs on which the bidders sat.